Oakdale, California, July 21, 2021 (Global News Service)-Oak Valley Bank (NASDAQ:Ovilli) (The “Company”), the bank holding company of Oak Valley Community Bank and its East Sierra Community Banking division, recently announced unaudited consolidated financial results. For the three months ended June 30, 2021, consolidated net profit was US$3,960,000, or diluted earnings per share (EPS) of US$0.48, compared to US$4,357,000 in the previous quarter, or US$0.53 per share, and US$2,581,000 in the same period. That is, earnings per share of $0.32 a year ago. Consolidated net profit for the six months ended June 30, 2021 was US$8,316,000, or earnings per share of US$1.02, an increase of 57.2% compared with US$5,290,000 or earnings per share of US$0.65 in the same period in 2020.
Compared with the previous quarter, the decrease in net income in the second quarter was partly attributable to the decrease in loan interest and expenses for payroll guarantee program (“PPP”) loans. PPP loan interest and expense income in the second quarter of 2021 was US$2,202,000, compared with US$2,590,000 in the previous quarter and US$1,092,000 in the second quarter of 2020. Year-to-date, PPP loan interest and expense income in 2020 totaled US$4,793,000 and was US$1,092,000 in the same period last year. Since the launch of the PPP loan program, the bank has provided a total of US$345 million, of which US$194 million has been paid through SBA forgiveness payments. As of June 30, 2021, the outstanding balance was US$151 million.
Net interest income for the three months ended June 30, 2021 was US$11,988,000, compared with US$12,242,000 in the previous quarter and US$11,146,000 in the same period last year. The reason for the decrease compared to the previous quarter was the interest and expenses of the aforementioned PPP loans. As of June 30, 2021, the year-on-year increase in core loans (excluding PPP loans) totaled US$24.2 million, partially offsetting the decline related to the March 2020 PPP and FOMC interest rate cuts.
The net interest margin for the three months ended June 30, 2021 was 3.09%, compared with 3.43% in the previous quarter and 3.55% in the same period last year. The compression of interest margins is due to the increase in low-yield cash balances, injection of short-term PPP loans with a yield of 1%, and the FOMC interest rate cut in March 2020, which will have a continuing adverse effect on profitable assets when repricing or mature yields.
Non-interest income for the quarter ended June 30, 2021 was US$1,405,000, compared with US$1,176,000 in the previous quarter and US$1,023,000 in the same period last year. Compared with the previous quarter, the increase in the second quarter was mainly due to an increase in service fees for deposit accounts, an increase in debit card transaction fees, and a decrease in unrealized losses on a stock security.
For the quarter ended June 30, 2021, non-interest expenses totaled US$8,215,000, compared with US$7,720,000 in the previous quarter and US$6,874,000 in the same period last year. Compared with the previous period, the increase in the second quarter was mainly due to the reduction in deferred costs associated with subsidized PPP loans, which were included in salary expenses. In addition, personnel expenses and general operating costs associated with servicing the growing portfolio of loans and deposits have increased.
As of June 30, 2021, total assets were US$1.76 billion, an increase of US$99.1 million and US$299.6 million over March 31, 2021 and June 30, 2020, respectively. The total amount of loans on June 30, 2021 was US$944 million, a decrease of US$84.9 million and US$59.3 million from March 31, 2021 and June 30, 2020, respectively, mainly due to PPP forgiveness payments. As of June 30, 2021, corporate deposits totaled US$1.61 billion, an increase of US$96.7 million and US$314.6 million over March 31, 2021 and June 30, 2020, respectively.
“In recent quarters, our balance sheet has grown unusually, a testament to our strong business model and commitment to the communities we serve. This growth is driven by the expansion of our core banking relationships, which are definitely Will prosper in the next few years,” said President and CEO Chris Courtney.
As of June 30, 2021, non-performing assets (“NPA”) were US$362,000 or 0.02% of total assets, compared to US$362,000 or 0.02% of total assets as of March 31, 2021, and US$927,000 or 0.02% as of 2021. 0.06% of total assets as of June 30, 2020. The year-on-year decrease in non-performing assets was due to the payment of non-accrual loans and the subsequent credit enhancement of the loans recorded in the fourth quarter of 2020 that returned to accrual status.
Due to the reduction in outstanding PPP loans that do not require loan losses, the loan loss provision for total loans increased from 1.10% on March 31, 2021 and 1.14% on June 30, 2020 to 1.20% on June 30, 2021 Reserves because they are guaranteed by the federal government through the SBA program. The company did not record loan loss reserves in the second quarter or first quarter of 2021, while the reserve in the second quarter of 2020 was US$1,860,000, corresponding to risk-based qualitative discretion related to the COVID-19 pandemic and the corresponding economy Adjust the pressure.
At its meeting on July 20, 2021, the Board of Directors of Oak Valley Bancorp announced that it will pay its registered shareholders a cash dividend of $0.145 per common share at the close of business on August 2, 2021. The payment date is August 13, 2021, and the total amount is approximately US$1,194,000. This is the company’s second dividend payment in 2021.
Oak Valley Bancorp operates Oak Valley Community Bank and its Eastern Sierra Community Banking division, which provides a variety of loan and deposit products to individuals and small businesses. They currently operate through 17 conveniently located branches: Oakdale, Turlock, Stockton, Patterson, Ripon, Escalon, Manteca, Tracy, Sacramento, two branches in Sonora, three branches in Modesto and East Three branches of the Sierra Leone branch, including Bridgeport, Mammoth Lakes and Bishop.
For more information, please call 1-866-844-7500 or visit www.ovcb.com.
This press release contains forward-looking statements about the company, which the company claims is protected by the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are based on management’s current knowledge and beliefs, including information about the company’s possible or assumed future financial conditions and the results of its operations and business. Forward-looking statements are subject to risks and uncertainties. Many important factors may cause actual results to differ materially from those in the forward-looking statements. These factors include fluctuations in interest rates, government policies and regulations (including monetary and fiscal policies), legislation, and economic conditions, including the increase in California energy costs, the credit quality of borrowers, operational factors, and competition in geographic and business areas. The company conducts business. All forward-looking statements contained in this press release are based on information available at the time of publication, and the company assumes no obligation to update any forward-looking statements.
|contact:||Chris Courtney/Rick McCarty|
|Oak Valley Bank|
|Financial summary (unaudited)|
|(In thousands of U.S. dollars, except per share)||Second quarter||the first season||Fourth quarter||the third quater||Second quarter|
|Part of the quarterly operating data:||2021||2021||2020 year||2020 year||2020 year|
|Net interest income||$||11,988||$||12,242||$||12,128||$||11,455||$||11,146|
|Loan loss provision (reversed)||——||——||(338)||)||193||1,860|
|Net income before income tax||5,178||5,698||5,706||4,989||3,435|
|Income tax reserve||1,218||1,341||1,057||1,241||854|
|Earnings per common share-basic||$||0.49||$||0.54||$||0.57||$||0.46||$||0.32|
|Earnings per common share-diluted||$||0.48||$||0.53||$||0.57||$||0.46||$||0.32|
|Dividends paid on common shares||$||——||$||0.145||$||——||$||0.140||$||——|
|Average return on common stock||11.77||%||13.44||%||14.58||%||12.19||%|